US cocoa futures settled higher on Wednesday. The Reuters-Jefferies CRB Index of 19 commodities rose 2 percent to a one-week high. Analysts said money was returning to commodity markets as investors realised the fundamentals that drove oil, gold and wheat to record highs this year will not change regardless of credit conditions.
Investors sold profitable positions in commodities last week to cover losses in stocks. Further losses in stock markets on Wednesday encouraged investors to put more money into raw materials. "We believe that it is not an exaggeration to contend that the commodity markets last week appeared to be on the verge of a significant pullback as investors deleveraged out of a range of asset classes and, in the process, reduced or eliminated their exposure to commodities," said James Steel, a metals analyst with HSBC in New York.
NYMEX crude finished up $4.68 at $105.90 a barrel. It had reached a session high of $106.20 on news that gasoline inventories fell by 3.3 million barrels as US refiners slowed production to their lowest levels since October 2005, when several refineries were knocked offline by hurricanes.
NYMEX crude hit a record high of $111.80 on March 17 before falling to a three-week low on March 20 amid a widespread liquidation in commodities. London Brent crude settled up $3.39 at $103.99.
COMEX gold for April ended up $14.20 at $949.20 an ounce after reaching $952.50 - a peak since March 19 - on the back of the dollar's slump and an unexpected fall in US durable goods orders that led to worries about the economy. April gold reached an all-time high of $1,033.90 on March 17 before sinking to a one-month bottom of $904.70 on March 20. COMEX copper for May ended up 4.65 cents at $3.7250 a lb.
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